Ray Dalio

The government interest rate is the backbone of all markets. If we tackle the debt problem now while the economy is good, we can get our debt issues under control and the bond market will rally. Read my free report at the link in my bio to learn more about my 3% solution to the debt crisis to lower U.S. interest rates. #principles #raydalio #howcountriesgobroke

When I entered my third phase in life I wanted to pass along the things I’ve learned to you all, first in the form of Principles of Life, Work, and now Debt. My new book, How Countries Go Broke, is the most pressing book that I have ever done. It deals with the debt crisis that we are dealing with right now. Please sign up at the link in my bio to learn more. #principles #raydalio #mentor #economics

Metrics show how the machine is working by providing numbers and setting off alert lights in a dashboard. Metrics are an objective means of assessment and they tend to have a favorable impact on productivity. If your metrics are good enough, you can gain such a complete and accurate view of what your people are doing and how well they are doing it that you can almost manage via the metrics alone. In constructing your metrics, imagine the most important questions you need answered in order to know how things are going and imagine what numbers will give you the answers to them. Don't look at the numbers that you have and try to adapt them to your purposes, because you won't get what you need. Instead start with the most important questions and imagine the metrics that will answer them. #principleoftheday

#principleoftheday

Principles are hierarchical--some are overarching and some are less important--but they all should inform the policies that guide your individual decisions. It pays to think those policies through to ensure that they are consistent with each other and the principles they are derived from. When faced with a case that doesn't have a clear policy to follow (for example, what to do about an employee whose job is to travel but who faces potential health risks because of his travel), one can't just snatch an answer out of the blue without regard for higher-level principles. Policymakers must make policy in the same way that the judicial system creates case law--iteratively and incrementally, by dealing with specific cases and interpreting the law as it applies to them. That is how I have tried to operate. When a case arises, I lay out the principles behind how I am handling it and get in sync with others to see if we agree on those principles or must modify them to make them better. #principleoftheday

The problem isn’t the deficit, the problem is the politics associated with solving the global deficit. Read more about my 3% solution in the free report at link in my bio. #principles #raydalio #howcountriesgobroke

At the beginning of the last stage of the Big Debt Cycle when there is a big debt crisis, debt problems typically spread from the private sector to the central government and then to the central bank. When that happens, conditions deteriorate quickly unless managed very well and very quickly by central governments and central banks. At that time, private holders of debt sell the debt fearing bad returns. That selling takes the form of “runs on banks.” By “runs on banks” I mean the turning-in of debt assets to get real money which lenders-banks don’t have enough of. When debt problems become apparent and the holders of the debt assets sell their debt assets, that initially drives interest rates on the debt up. This makes the debt more difficult to service, hence more risky, which drives interest rates higher. At that point, the central bank typically provides money and credit to fill in for the inadequate demand, which reduces the value of money and credit and reduces credit risk. You can read Part 4 of my free study, “How Countries Go Broke” at the link in my bio.

Remember this: The pain is all in your head. If you want to evolve, you need to go where the problems and the pain are. By confronting the pain, you will see more clearly the paradoxes and problems you face. Reflecting on them and resolving them will give you wisdom. The harder the pain and the challenge, the better. Because these moments of pain are so important, you shouldn’t rush through them. Stay in them and explore them so you can build a foundation for improvement. Embracing your failures—and confronting the pain they cause you and others—is the first step toward genuine improvement; it is why confession precedes forgiveness in many societies. Psychologists call this “hitting bottom.” #principleoftheday

At this critical time I feel the need to share my solution before we pay a terrible price for the crushing US debt. You can find my new free study at the link in my bio. #principles #raydalio #howcountriesgobroke

You can also calculate what a return to a more normal level of buying/selling would look like and you can calculate the approximate price change that is needed and likely. I have made a lot of money and have reduced a lot of risk by doing that. #principleoftheday #howcountriesgobroke

For Presidents' Day this year, I’m resharing these principles from President Lincoln that I believe continue to be very relevant today: #PresidentsDay #principleoftheday

Most people make bad decisions because they are so certain that they're right that they don't allow themselves to see the better alternatives that exist. Radically open-minded people know that coming up with the right questions and asking other smart people what they think is as important as having all the answers. They understand that you can't make a great decision without swimming for a while in a state of "not knowing." That is because what exists within the area of "not knowing" is so much greater and more exciting than anything any one of us knows. #principleoftheday